U.S. Fresh Beef Back in Brazil

U.S. fresh beef exports are back in Brazil! Following a 13-year hiatus, the first shipment of U.S. fresh beef has arrived in Brazil, ushering in promising long-term market opportunities for the U.S. beef industry. In 2016, the United States exported $6.3 billion in beef and beef products globally. With Brazil’s large market reopened to the United States, beef exports are poised for new growth.

Brazil closed its market to imports of U.S. fresh beef in 2003 over concerns about bovine spongiform encephalopathy (BSE). Since then, the U.S. Department of Agriculture’s (USDA) worked continuously with Brazilian officials to regain market access.

As the U.S. agriculture industry witnesses this first shipment of fresh beef arriving in Brazil, it’s the ideal time for U.S. exporters to re-engage in marketing efforts in the country. Currently, Brazil’s main suppliers of fresh/chilled beef are Paraguay, Uruguay and Argentina – both because of their proximity to Brazil and because they enjoy duty-free access as a result of the Mercosur customs union.

From 2014-2016, Brazil imported an average of $296 million of fresh/frozen beef, or 50,000 metric tons, annually. Despite the competition from Mercosur countries and a 10-percent tariff differential for countries outside the customs union, the United States is in a great position to compete in the Brazilian market thanks to the ability to target highend consumers.

Brazil is still attracting a stream of foreign direct investment even after a corruption scandal involving its meat industry, the country’s finance minister said.

The scandal, which broke in March, stems from a two-year Brazilian police investigation, which revealed how meatpackers paid off inspectors and politicians to over-look practices that include processing rotten meat and shipping exports with traces of salmonella.

“I don’t worry about that, I think that is pretty safe,” he told CNBC.

“The question now is one of the producers assuring everyone the quality is good and definitely inspections will be made and quality is going to be analyzed, which is fair and good for everyone involved at the end of the day,” Meirelles said.